Fiscal and Legal Implications of Expanding Health Benefits to Include Weight-Loss Drugs in Illinois

A class of drugs known as GLP-1 receptor agonists has exploded in popularity in the past year among people trying to lose weight for one reason or another. Among these medications are brands like Wegovy and Ozempic, made by a company headquartered in Denmark called Novo Nordisk, and Mounjaro, which American pharmaceutical company Eli Lilly makes.   

These drugs have been used to slim down celebrities, including Amy Schumer, Oprah, and Elon Musk, among others. This has led to some controversy because these drugs were initially created for use among people struggling with diabetes, obesity, and overeating disorders, and their off-label use for non-medically necessary weight loss has led to shortages for people who rely on them. Additionally, the price tag for these drugs is prohibitively high for many people, costing upwards of $16,000 per year in some cases.  

Illinois State Government Coverage 

The State of Illinois offers its government workforce a choice among nine different health insurance plans. This healthcare is paid with taxpayer money, and changes to it go through a budgeting process in the state legislature. Starting July 1 of this year, health insurance carriers who are part of the state health program will cover the high-priced weight loss medications for government employees.  

This may seem innocuous enough, but due to the exorbitant price of these medications, it may cost taxpayers hundreds of millions of dollars.  Governor J.B. Pritzker’s administration has estimated it will need $210 million to fund the first year of coverage. Still, according to one economist who spoke to WBEZ, it could be nearly three times as much annually. This would depend on how many people who are covered by the state health insurance program will choose to access these medications, but given their rising popularity, it would be prudent for the state to earmark a larger sum.   

House Bill 3817 

The expanded coverage was unveiled in a four-sentence section of an 899-page budget bill introduced on the last day of the spring legislative session last year. Section 6.11C of House Bill 3817 states that “the State Employees Group Insurance Program shall provide coverage for all types of injectable medicines prescribed on-label or off-label to improve glucose or weight loss for use by adults diagnosed or previously diagnosed with prediabetes, gestational diabetes, or obesity.” It also states that to continue to qualify for this coverage, members must participate in a lifestyle management plan administered by their health plan.  

Under the Radar Provision 

This was not mentioned at any point during floor debate in the General Assembly, so the additional cost of hundreds of millions of dollars flew under the radar of even the most budget-conscious lawmakers. Legislators who only discovered this provision months later shared their frustration at the seeming lack of transparency. Those lawmakers say they were not given a reasonable opportunity to find and understand the provision before it sailed through the chamber.  

Not Eligible Through Medicaid  

The legislation does not apply to low-income and disabled residents of Illinois who are enrolled in Medicaid. That encompasses 3.9 million people, and this population, in particular, tends to struggle more with weight-related illnesses and negative health implications from obesity than the rest of the state's population. Those enrolled in Medicare Advantage Plus through the state group plan and who are retired are also not eligible.   

Implications 

The ideal scenario would be that the use of these weight loss drugs among the state’s workforce would have such improved health outcomes that they would require less medical care overall, leading to a decrease in the state group plan over time. But that is not necessarily realistic.  

In an article published in the New York Times, a group of researchers, including a former director of the National Economic Council, chairman of the economics department at Massachusetts Institute of Technology, and a former staff economist at the Council of Economic Advisers in the White House issued a warning regarding this topic. They predicted that the cost of providing access to these drugs to people who suffer from obesity-related health problems could reach more than $1 trillion annually, while the savings that would come from fewer people requiring medical care for those same obesity-related health problems such as diabetes would be $800 million. This would end up being a $200 million deficit annually. It may be ironic that the state of Illinois estimates that $200 million is around what it would cost to provide access to these medications to its employees, or it may be planned. There has not been much transparency around the state government’s goals concerning this new provision, so it is hard to say. 

With a big-ticket item like this in the state budget, there will have to be appropriations and legislative amendments in order to find a source of money to fund this program. It is desirable on its face, but the process required to balance out the interest in being fiscally responsible with providing government employees this access will be complicated.  Taxpayers will fund the majority, to be sure, but there are creative ways to find sources of funding. It will be up to the state legislature to find a reasonable solution in the upcoming sessions, but let this be a lesson that reading the fine print is important.